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Choosing Green: the status and challenges of renewable energy based open access

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Author(s): Jatin Sarode, Ashwin Gambhir, Nikita Das, Shantanu Dixit Publication Date: November, 2017

In spite of the growth in short term open access (OA), the existing OA framework has not been implemented in the same spirit as envisaged in the Act and is thus is yet to realize its full potential, mainly on account of the resistance from DISCOMs. Given the rapidly falling price of wind and solar power, renewable energy (RE) based OA and captive options are likely to pick up in a big way in the coming years. More importantly, considering the unique characteristics of RE generation like intermittency, seasonality etc. coupled with concessional OA charges in some states and provisions like energy banking will bring newer challenges for the OA framework. This report begins with trying to establish the status of renewable energy based OA in few RE-rich states. One of the critical findings from this exercise is that availability of OA data is extremely poor, is spread across multiple sources and thus is a strong hindrance to critical and objective analysis of various policy-regulatory challenges like – roadmap for removal of concessions for renewable energy, impact of banking on DISCOMs etc. There is a dire need for greater public availability of comprehensive data related to OA in general and RE-OA in particular. Falling power prices are quickly rendering most concessions and waivers unnecessary for renewable energy. Hence the report recommends a gradual withdrawal of such concessions to encourage the growth of RE based OA on its own fundamental economic proposition. Finally, given the inherent seasonal and diurnal variation in RE generation, RE based OA is presently quite unviable without some form of banking framework. The report critically analyses a new energy banking framework which appropriately values banked and unbanked energy in monetary terms. Such a banking framework coupled with the forecasting, scheduling and deviation settlement mechanism regulations will address renewable energy’s seasonal and day-ahead variation respectively to a large extent. In effect these two frameworks would largely internalize the cost of RE grid integration, thereby paving the way for further RE capacity addition.

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